The Myth of the Digitally Dumb Mom-and-Pop Shop

An old sawhorse of the punditocracy is that one of the reasons hyperlocal is taking off so slowly in terms of advertising revenues is due to the digital noobieness of local merchants. Journalists (myself included) love to trot out stories reminding the world that X-percent of mom-and-pop shops still don’t even have a Web site, for crying out loud. Yes, you hear stories that lots of small businesses are active on Twitter and Facebook and check their Yelp profiles. Some even pay marketing agencies to run their social side. But for the most part, these peeps are trapped in the dark ages. Or are they?

BIA/Kelsey released the latest installment of its Local Commerce Monitor research. This is a unique longitudinal 15-year tracking study of how SMBs spend money on advertising and their attitudes towards local advertising and media. The analysts found that SMBs in the survey planned to spend a surprising 26% of their advertising and marketing budgets on digital campaigns. Marketing and advertising consultancy eMarketer forecasted recently that total online ad media spend for 2012 would be roughly 23% of the total media spend across all mediums. Surveys can be wrong. But this would imply that the mom-and-pops are actually ahead of the rest of the advertising world in embracing digital. Go figure!

It gets better. Nearly half of respondents (49 percent) said they buy online advertising (including SEM) themselves, debunking the myth that only a handful of brainiac small shop owners had cracked the admittedly complicated SEM buying scenario. More than half (52 percent) are using social media to try to generate business. The quality and commitment of those campaigns surely varies widely but the implication is clear. The small businesses who “get” social are no longer a small minority. Nearly a quarter said they plan to have a video on YouTube in upcoming months (which might be good news for Patch.com and its efforts to sell video sponsorships and video-driven directory listings).

Not all surveys have found that mom-and-pops are hip to local online ads. In a survey of 51 local merchants with revenues ranging from less than $100,000 to over $5 million conducted by Street Fight Insights, less than 10% said they had spent significant dollars on a hyperlocal campaign. Street Fight also found that small merchants were more interested in daily deal sites than traditional online advertising. I look forward to Street Fight coming out with a broader sample but these seemingly contradictory results could be chalked up to the relative infancy and volatility of the sector.

Flawed as they may be, the BIA/Kelsey findings actually conform closely to conversations I have had with many small business owners. Unlike the bigger companies, where ad budgets have plenty of wiggle room and specialists carve up media buying, analytics and creative duties, for mom-and-pops stuff has to give them a decent return the very day after they execute their campaign. And because they are in small communities, their feedback loop is very tight. So for many of the technology driven startups that have had difficult times cracking the hyperlocal market, these results may deliver a relevant data point. Namely, your product may not be easy enough to use or popular enough to merit attention from these smaller shops. Because it has to work the first time for them to stay interested.

Not that this should be discouraging. In the early days of the Internet, websites were atrociously hard to use and navigate. Diddling with search engines to get decent results pre-Google was a nightmare. Things are always sharper and harder on the bleeding edge. The mom-and-pops feel that edge more acutely than most and will not accept inferior UI or product design. Because, unlike the big guys, they don’t have an office job and are always one step away from having no business at all. Clearly they are willing to try new things and embrace new tools, at least as aggressively as the rest of the market (call it the SMBification of IT). But they will ditch those tools just as fast. So make it stick. You only get one chance.